The second dispute with Congress that could derail Obama's Iran deal

Behind the showdown between President Barack Obama and Congress over the Iran nuclear deal is a second dispute that could cost the White House allies it needs to ensure the agreement survives: Whether and when to renew a key law that imposes sanctions on Tehran.

Under the nuclear deal, Obama would suspend the sanctions imposed by Congress, but the statutes can stay on the books as a safeguard in case Iran reneges and the president needs to “snap” the sanctions back. But the law in question, the Iran Sanctions Act, is set to expire in late 2016.

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Skeptics of the Iran deal, including Sens. Mark Kirk (R-Ill.) and Bob Menendez (D-N.J.) want to go ahead and renew ISA now through 2026. They argue that extending the act would send a signal that the U.S. is serious about its willingness to “snap back” sanctions if Iran fails to dismantle much of its nuclear program or otherwise cheats.

The White House, however, is urging lawmakers to hold off. The official argument, made in congressional hearings and other forums by Treasury Secretary Jack Lew and fellow administration officials, is that it’s “premature” to extend ISA now. When pressed to expand on their reasoning, administration officials go only slightly beyond that talking point, saying they support eventual renewal of ISA, but not now.

What’s left unstated is the possibility that Iran would view a renewal of ISA as a provocation — perhaps grounds to allege the U.S. is violating the agreement before it’s even fully implemented — and that extending it could affect the political dynamics in Tehran, where hardliners also oppose the deal.

Regardless, the administration’s vague answers on ISA is puzzling many lawmakers and risks squandering potential good will in Congress.

“If the administration is worried about trying to get Democrats or anybody else who might be undecided or sitting on the fence, then this doesn’t seem like the right approach,” said Blaise Misztal, director of the national security program at the Bipartisan Policy Center. “I would think that if they’re trying to sell this deal, then it would make sense to at least signal they’re going to support an extension of ISA.”

Those potential allies include Sen. Jeff Flake of Arizona, perhaps the only Republican still undecided on the deal. Last week, during a speech on the floor about the agreement, he pointed to the ISA renewal as a stumbling block.

“The degree to which the administration has resisted even the suggestion that Congress reauthorize the Iran Sanctions Act, for example, which expires next year, just so that we might have sanctions to snap back, makes us question our willingness to confront Iran when it really matters down the road,” Flake said.

The GOP-led Congress is expected to vote against the nuclear deal in September, but the president has promised a veto, and for now it appears lawmakers won’t be able to override him. It’s clear, however, that opponents of the deal are looking at ways they can strengthen U.S. sanctions on Iran even if the nuclear agreement is implemented.

Sen. Bob Corker, chairman of the Senate Foreign Relations Committee, recently said an ISA extension would probably pass not long after Congress finishes its debate on the Iran deal, even if the government in Tehran bristles over it.

Other lawmakers have raised the possibility of imposing new sanctions on Iran for actions unrelated to its nuclear program. Already under the agreement, the U.S. will retain sanctions on the country linked to terrorism, human rights abuses and its ballistic missile program, so lawmakers could expand on those.

Administration officials warn, however, that Congress cannot take existing nuclear-related sanctions and simply relabel them without violating the agreement. They also insist the U.S. retains extraordinary power to penalize Iran through executive actions; As it is, many of the nuclear sanctions on Iran have been issued through the executive branch and would be lifted under the deal.

Asked to explain the White House’s resistance to extending ISA — including whether an extension could be construed as a violation of the nuclear deal or whether the White House will eventually support a re-authorization of the law — administration officials have been careful in their comments.

“We absolutely support renewal of the ISA,” a senior official told POLITICO. “It’s an important piece of legislation, and we want to discuss renewal with Congress in a thoughtful way at the right time. Now is not that time, as the ISA does not expire until next year, and because we are focused on implementation of the (nuclear agreement). We will have plenty of opportunity in the coming months to take part in the deliberate and focused communications with Congress on this important topic.”

Richard Nephew, a sanctions expert and former administration official who negotiated with Iran, said he didn’t think that in the long run Iran would view a re-authorization of ISA as a big enough reason to walk away from the deal, which took years to negotiate with the participation of seven countries. Iranians are sophisticated enough to understand that a president could keep waiving the ISA-mandated sanctions, he said.

But Nephew and others noted that the White House could be worried that a measure to extend ISA now could suddenly morph into something more threatening to the deal: a legislative vehicle used by strident opponents to blast holes in the agreement. It will take months before the deal is in full effect, so such actions in Congress would come at an exceptionally delicate time.

The administration is likely worried about “the bad will that you’re beginning to accumulate if you start going down this road and how this could possibly be one of a series of injurious policies that would in collective make Iran feel as though they aren’t receiving the benefit of their bargain,” said Elizabeth Rosenberg, a former senior adviser on sanctions at the Treasury Department.

Another possibility is that the administration could in the weeks ahead agree to an extension of ISA as a way to placate some lawmakers, many of them Democrats, who are still weighing whether to back the overall nuclear deal.

“It’s possible the White House could have a change of heart for tactical reasons,” said a senior Republican congressional staffer. “Perhaps it might tip the scales for some members who are skeptical.”